One of the biggest hurdles to overcome in seeking help for a drug or alcohol abuse problem is the financial impact it carries. Many people who need substance abuse rehab don’t have insurance, or they have a policy but it doesn’t cover substance abuse treatment. In 2011, millions of people went without the treatment they needed, and 37.3 percent of them cited the reason for such being that they didn’t have insurance and couldn’t otherwise afford to pay for treatment, per the Substance Abuse and Mental Health Services Administration.
When the Affordable Care Act was put into action in late 2013, 17.1 percent of Americans didn’t have health insurance. A Gallup poll reports that figure plummeted to 11.9 percent by the first quarter of 2015.
Along with the onslaught of people signing up for self-pay insurance plans under the ACA, many states expanded their coverage terms for Medicaid. As a result, the Heritage Foundation notes nearly 9 million people were enrolled in Medicaid coverage during 2014 alone. All plans purchased through the government healthcare exchange and all Medicaid plans are required to provide coverage for both substance abuse and mental health treatment.
That being said, how much coverage is provided is debatable. Medicaid covers all aspects of treatment, but certain states may not reimburse payments toward court-ordered treatment. Furthermore, not all providers and facilities have to accept Medicaid. Only 7,341 do in America, per the SAMHSA Treatment Facility Locator Tool.
Private plans bought through the exchange only have to offer coverage under their own terms. This means insurance companies still require people to use in-network treatment facilities to keep costs low. In addition, the insured party will usually have some cost-sharing responsibility when it comes to deductibles and even overall treatment. For example, an 80/20 Gold plan may require a $2,000 deductible before they’ll pay out on the 80 percent that they’ll cover. That still leaves the other 20 percent for the insured person to pay. These plans are not required to enforce out-of-pocket maximums on these treatment services. Grandfathered plans don’t have to provide these coverages at all.
It is important to be aware of how rehab services are billed. It isn’t a lump sum, but rather each subset of care can be billed separately. This makes the insurance process far easier if someone does have coverage. That being said, it also means certain parts of treatment may be covered while others are not. While therapy and medication for mental health disorders may be included in a policy’s coverage, the same policy might not cover inpatient treatment accommodations, detox or alternative therapies like equine assisted therapy and acupuncture.
Most insurance policies now cover prescription medications used to treat addictions. The most popular of such are methadone and buprenorphine, with the latter likely having the most coverage options. The reason for this is that buprenorphine is available from a doctor via a prescription, while methadone requires more oversight and near-daily dispensing from a facility. Usually, these clinics also require routine urinalysis and time in support groups or therapy as part of their programs. Those parts of the program aren’t always covered by every insurance plan.
Treatments required for mental illness are covered, which is an impressive benefit considering 45 million Americans suffer from one or more mental health disorders, per Psych Central.
Some treatment centers offer their clients the option to finance their stay in rehab. In most cases, they will make use of third-party organizations that handle the financing aspects for them. These come in the form of lending institutions and healthcare credit cards. This is beneficial to both the treatment center and the client, and removes conflict of interest.
Just as if someone is applying for an automobile loan or mortgage, these companies take into account the individual’s credit and work history in order to determine their eligibility for financing. Lenders need to know that there is a good enough of chance of getting their money back in order to hand it out. Despite the fact that many people who are in need of substance abuse or mental health treatment may have difficulty holding down a job and paying their bills, many still qualify for financing. The overall goal is to see that they get the treatment they need and can in turn get back to work and paying off their debts.
Most lenders will require a FICO score of at least 550. That being said, a score that low will generally garner no more than $30,000 or $40,000 in financing. Fortunately, that’s enough for most people who are seeking outpatient treatment. Individuals seeking inpatient care or planning to attend a luxury rehab facility could need as much as $100,000 to pay for it, depending on the length of stay. Such a large sum of money will typically require a FICO at or above 670. Governing reports the average credit score among Americans is 687. People looking for larger loans will also need to have a stable and low debt-to-income ratio.
Interest rates can be as high as 35 percent on some of these loans. Shopping around and comparing rates is worthwhile. Before applying for any of these loans, people in need of treatment should exhaust other resources at their disposable. Look at using funds from a workplace 401K or retirement savings. Check out crowdfunding sites, and see if friends and family can help. Other lenders may be more preferable. For clients who have strong relationships with their bank, a personal loan may serve them better than healthcare credit cards or treatment financing plans.
Getting a jumpstart on the financial specifics of treatment can only be beneficial. Being prepared can only help to improve the overall financial outcome. Start by contacting a treatment center to discuss the options available for paying for treatment. Some important questions to ask include:
- How much would treatment cost?
- What portion will insurance pay for?
- When is payment due?
- What happens if someone falls behind on payments?
- Is there an option to finance, and if so, what are the interest rates?
Certain services may also be available during or after treatment at little or no cost for people who have limited financial means. Many public and religious organizations offer counseling and access to support groups for little to no money. For instance, organizations like Narcotics Anonymous and Alcoholics Anonymous usually ask for a small donation, even as small as $5. Prescription savings cards may be helpful in some cases to cover the cost of medications for ongoing treatment when it is needed, such as in the case of a diagnosed mental health disorder.
The costs of ongoing addiction and untreated mental health issues add up to be far greater than the cost of treatment. And the costs are not just financial; they reach into virtually every area of a person’s life. Don’t let financial obstacles stand in the way of getting help. Reach out for assistance today.